Viatical Settlement Industry ‘Bruised’ as Antiretrovirals Extend HIV Patient Life Expectancy
Companies dealing in viatical settlements -- in which a company or investor purchases a life insurance policy below its value from a policy holder and then collects a profit when the person dies -- have been "hurt" by the "longer life expectancies" of HIV-positive people taking antiretroviral drugs, the Washington Times reports. Viatical settlements became "popular" in the late 1980s, "at the height of the AIDS epidemic," the Times reports. Viatical firms purchase life insurance policies from policy holders at approximately 40% to 85% of the policy's actual value. Then the firm or the investors that own the policy after the holder's death collect the value of the policy. The transaction gives the policy holder "quick cash," while companies usually cull a return of 12% to 35% on each policy purchased. However, the advent of antiretrovirals has "bruised" the viatical industry, since investors may see "smaller profits" or even losses when a policy holder "lives beyond his estimated life expectancy." Doug Head, executive director of the Viatical and Life Settlement Association, said that antiretrovirals are "a blow to the industry, in the sense that people were not buying policies, but it's certainly a wonderful thing for the terminally ill individuals who were otherwise slated to die." Some viatical companies have starting checking the medical records of potential clients and procuring a doctor's estimate of the patient's life span (Stefanova, Washington Times, 8/23).This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.